Accounting Monthly Recurring Revenue (Annual) Calculator FAQ

MRR is recurring subscription revenue measured on a monthly basis from active customer agreements. It commonly excludes one-time charges and non-recurring services.

ARR is an annualized recurring-revenue run rate. In this calculator, it is ending MRR multiplied by 12.

No. ARR is a point-in-time annualization of the current MRR run rate and does not predict future sales, renewals, or churn.

Not necessarily. Total annual revenue can include one-time sales and may follow revenue-recognition timing that differs from an ARR run rate.

New MRR is recurring revenue from customers acquired during the month.

Expansion MRR is additional recurring revenue from existing customers, such as upgrades, extra seats, add-ons, or higher committed usage.

Contraction MRR is revenue lost when an existing customer remains subscribed but pays less after a downgrade or reduced commitment.

Churned MRR is the full recurring revenue lost when a customer cancels or does not renew.

It can occur in detailed records, but use a consistent reporting method and avoid counting the same revenue movement twice.

Net MRR change equals ending MRR minus beginning MRR. It is the overall monthly increase or decrease after every listed movement.

Net revenue retention equals beginning MRR plus expansion MRR minus contraction MRR minus churned MRR, divided by beginning MRR, multiplied by 100.

The metric is designed to measure the retained and expanded value of the customer base that existed at the beginning of the period.

It means contraction and churn from the beginning customer base exceeded expansion from that same base during the period.

Ending MRR and ARR can still be calculated, but net revenue retention cannot be calculated because there is no beginning MRR to use as a denominator.

No. This calculator is intended for recurring subscription revenue, so one-time fees should generally be excluded.

Use a consistent internal reporting definition. Many recurring-revenue reports exclude taxes because they are not subscription revenue retained by the business.

Not directly. Reflect them only if your reporting policy treats them as changes to recurring MRR, and keep the treatment consistent.

It is an estimate of recurring-revenue metrics. Financial statement reporting may require different treatment based on applicable accounting policies and contract details.